University of Hawai'i University Relations Media & Publications Honolulu, HI 96822	(808) 956-8856 Telephone (808) 956-3441 Facsimile ur@hawaii.edu E-Mail
Contact: Ron Wall, 956-2253	Air Date: April 30, 1998

Choices for Savings Pt. 2   Investing in short and intermediate-term risk is important, says University of Hawaii family financial counselor Ron Wall. Yesterday, I told you about CDs and money market funds. The third types of investment is short-term bond funds. These are also a variety of mutual funds. They stress safety of principal by minimizing the market risk from new bond issues offering higher rates. Problem is, short-term bonds do flucuate in value, no rate of return is guaranteed and they are not federally insured. On the positive side, they have a rate of return that may average about 1 percent or more above prevailing CD rates. Finally, there's the flexible bond fund. These include bonds from various sectors of the bond market. While some of bonds include higher risk the overall balance of these portfolio keeps the risk in moderation while seeking higher returns. Though the risk is higher in this category, returns may be twice those of prevailing 12-month CDs. This is the University Report, I'm Tracy Orillo Donovan.

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